Latest Car News in India

Wednesday, October 31, 2012

Fiat contemplates to produce two lakh engines in next 18 months

The Italian car maker Fiat has chalked out a plan to develop more than two lakh engines during the span of next 12 to 18 months. Auto aficionados suggest that this plan will help the Italian car maker to overcome losses that it had incurred from its partnership with Tata Motors.

Fiat will source around 100,000 diesel engines to the largest car maker in India, Maruti Suzuki India that uses Fiat diesel engines in its best selling cars like Maruti Swift and Maruti Swift Dzire. Fiat had inked a contract with Maruti Suzuki India to source one lakh units of diesel engines for the next three years. Apart from this, Fiat will ship 50,000 units of engines along with manufacturing engines for its own cars and Tata cars. The company’s manufacturing unit located in Ranjangaon will produce 14,000 Fiat cars and 40,000 Tata cars.

The cost of the engine lies between one fifth to 1 sixth of the total cost of the car. In case the company manufactures five folds more engines that the number of Fiat cars, it will enable the company to get a huge number of sales through its engines.

Fiat is looking forward to gain profit by producing a large number of engine which are in high demand. However, the company hopes to see a surge in sales when it opens its own showrooms and supply chains by next year that is 2013. Fiat’s Multijet diesel engine powers popular Maruti cars like Maruti Swift, Maruti Swift Dzire, Maruti Ritz and Maruti Ertiga. Apart from Maruti cars, the Fiat Multijet diesel engine also powers some of the Tata cars like Tata Vista, Tata Indigo Manza other than its own cars Fiat Punto and Fiat Linea.